Spin,
For me personally, it's when I get a hot fish on. You will know. A fish on the reel, will put itself on alot of times. Size of the fish, current, the aggression the fish uses to escape, all become a factor. If you're hand stripping a fish in and it gets "hot" on you, try to control your fly line as the fish is running with it until your near the end of the excess line. Then, wind up on the reel. Make sure you're layering the line evenly by using your index finger to put it on the reel. Line bunched to one side of your reel spool will cause many problems. Honestly, this will all become natural as you grow to the sport.

I doubt you will ever see the drag engage while you are fishing for bluegill and small largemouth (unless they strike right at the peak of your cast length.

I use a 6wt rod, 20lb mono leader, and 12lb mono tippet for these same situations, because theres a lot of vegetation that I need to yank my bass out of. I pretty much never worry about breaking off. Even if a fish does get on the reel, I never adjust the drag (which is set to very low) and simply hold the line to create drag when I need to).

I think drag is really all about what tipper sizes you are using, how big the fish are, and what tendency they have to run. Bass typically do not run, then tend to hunker down and head for vegetation. Bluegill make nice little runs, but are rarely large enough to warrant a second thought about giving them line (if you are using leaders/tipper designed for bass). Trout require small leaders and tippets and letting them play on the reel and drag may be a good thing. A nice smooth drag will protect a light tipper as it applies even resistance. This being said, some trout just like to splash around a bit and can be effectively fought by holding the line.

Really, its all preference for the large part I think. Sometimes I let fish on the real just for fun. Most times I just hold the line and pull them in, I think it's more fun that way. More fish-fisherman connection.

That was another question that I had! When do you reel in a fish and when do you just pull in the stripped line? I guess it's all a matter of the size of the fish and personal preference?

If it's a small fish it's probably better to just strip it in, but if it's easy to get it on the reel I'd do it any way. A lot of times a big fish will get itself on the reel for you, and if they don't you probably should. As I said in the post before, set your drag right, and that is why you should do it on the reel. It is better than most fisherman.

Breaking a fish off is operator error 100% of the time. Getting cut off by teeth or another object is another story. The reason you want to get a big fish on the reel though, is that you are never going to be as accurate a drag as the drag is. I recently watched a video where some guys broke fish after fish off. They had line out of the reel, fish in fast water and just held the line tightly till it broke the fish off. It was the silliest thing I have seen in a while.If they had just given the fish line, got them on the reel and let the drag do it's job (provided they were not so silly they set that wrong also), they would have landed every one of them provided they didn't shake the hook or something else we have no control over.

If a fish is willing to got the line on the reel for you, let them. A properly set drag is more accurate than you are, especially if you are full of adrenaline with a monster on the line.

One last thing, Okuma made a very good point about layering the line on the reel. If you just reel like crazy without regard for where it's going you can get it all on one side of the spool and jam the reel. It's a bad thing. The way I do it if control the rod and the line with one hand, and reel with the other. The hand on the rod gets the fish end of the line between my thumb and fore finger, and the reel end I control the place it goes on the reel with the crook of the first knuckle of my Karate Pinky.

Also keep in mind the drag is biased towards one direction. Even though you have a drag set, you typically do not have to fight the drag while retrieving.

If the reel is setup correctly, you will still be able to reel line in easily, And the drag will only engage while line is being pulled out. Different types of reels use different methods to allow the drag mechanism to disengage while reeling in, so you don't have to fight the fish and the drag within a retrieve.

At first this sounds like a pain, but after a little while it actually makes fighting the fish that much more engaging, as you each you and the fish need to pick your moments throughout the fight.

Even though the drag may feel relatively light to pull out by hand, the angle of the rod helps to build additional pressure on the fish

Learning to properly fight a fish on a fly rod, can also make you a better fisherman when fighting a fish using other methods. I'll never forget the day I took my sister fishing, and she hooked her first steelhead on a spinning reel. She still got it, but did just about everything wrong, she never once stopped reeling in throughout the entire fight. (She would probably make a good pro bass fisherman .) This fish she caught would have never made it to shore if she was fishing with a fly rod.

You say to get the fish on the reel because the reel's drag is better than I am. But I can't see how my drag will come into play unless I actually let go of the handle and palm the spool. Or is that what you are talking about?

And remember, I have yet to fish with my new fly rod. All I've done is take it out of the box and stare passionately at it (while my wife glares at me). So maybe I'm missing something obvious here that I'll see on first use.

You'll learn how much the tip of your rod will bend to act as a shock absorber to prevent your tippet breaking. The feel of that bend will tell you to let line slip through your fingers if you are playing the fish by hand, or to release the handle and let the fish run against the tension of the drag. The feel is something you need to learn. It doesn't hurt to rig up your rod, tie on some tippet and then tie it to a weight of several pounds. Start with a loose drag and about 20' of line and leader out , but not completely loose , or the reel can over spool resulting in a bird's nest. Pull on the weight and see at what point the drag lets line out. Increase it until there's a good bend in the rod, but you aren't in danger of breaking it. Walk backwards letting line out against the drag. Place your fingers across the bottom of the spool and add more tension. Get use to what that feels like. You can change tippet sizes and see at what point they break- just don't go heavy or you may put too much stress on the rod. Remember to be s-m-o-o-t-h when you fight a fish, abrupt reactions are what break things and lose fish. Fighting a fish with a flyrod is far more by feel than other more mechanical methods of fishing. That feel truly sets it apart.

I put everything on my reel, I know most people will disagree but I made myself get into this habit. Its just second nature now, I don't have to think about layering the reel and my line is cleared out of the way with no snags, it's much easier for me to manage. When you do hook that big one you are ready!

You say to get the fish on the reel because the reel's drag is better than I am. But I can't see how my drag will come into play unless I actually let go of the handle and palm the spool. Or is that what you are talking about?

Yes you need to take your hand off the handle. As I said, when you are using a spinning rod, you know when to stop reeling because the drag will allow line to go out. If you don't stop reeling with a spinning rod you twist the heck out of the line. If you don't get your hand off the reel handle on a fly rod 1 of 2 things will happen, 1 you bust off the fish or 2, the fish removes your hand from the handle and it whacks you on the knuckles. And I don't know where you heard the palming thing, but as a beginner, I would just set the drag right and when a fish burns one on you, get your hand clear off the reel and let the drag do it's job.

OK, here is a video where you can see two things. How to get your hand off the reel when a big fish runs on you, and getting a bigger fish on lighter line.

I was trying to bust the 8 lb tippet Walleye record, but there were a lot of big Pike in the area. So what I did was rig a leader with a 30 lb. mono bite tippet but and 8 lb test tippet so the big Pike wouldn't bite me off. I fight it and land it. Watch what I do when the fish runs.